So often we write about employers getting things wrong and the consequent cost of that error.  However in a recent Employment Relations Authority decision, an employer was vindicated for getting the process right.

Following a restructuring and subsequent redundancy, an employee lodged a personal grievance for unjustified dismissal.  The Authority dismissed the employee’s claim.  It found not only that the restructure was for genuine commercial reasons, but that the employer had followed a fair process in its execution.

In coming to its decision, the Authority made some of the following observations:

  1. An employer is entitled to make its business more efficient.  In this case the employer showed its employee nine separate reasons for the proposed restructure and the Authority concluded that they were genuine commercial reasons.
  2. An employer must act genuinely and not out of ulterior motive in making any redundancy decision.  In this case the employee had alleged that the purpose of the restructure was to allow the employer to take over one of the employee’s lucrative clients.  The employee also tried to argue that a role that had been created following the restructure was substantially similar to his role before the restructure.  In line with its finding that the restructure was for genuine commercial reasons, the Authority dismissed both of these claims.
  3. In line with legal requirements, the employer must ensure that there is sufficient consultation with employees in respect to any proposed restructuring.  In this case the Authority found that there had been ample time for feedback as well as a right to respond, the employer had adjourned meetings and extended deadlines as requested by the employee, and had entered full and frank discussions with the employee.

As this decision showed, the key aspects to a legal redundancy are a substantive justification for the redundancy and procedural fairness.

Whatever aspect of your business it applies to, following proper process is a must.  It can pay huge dividends if you take advice early and get things right from the start.